China’s Rare Earth Element Spider.

Spider Web"It takes seven [metric] tons of acid to produce one ton of rare-earth oxides, and the production creates a lot of ammonia, heavy metals and other pollutants," Mr. Zhu said. "Our policies are entirely for protecting the environment, resources and sustainable development" and "are in accordance with WTO rules," he said.

Yesterday China once again invited western firms to team up with Chinese firms “on rare-earth technology ventures, particularly on environment-friendly projects.”  It is of course, a good PR response in the early stages of the rare earths, World Trade Organisation dispute with America, the EU and Japan, now just starting exploratory discussions between the parties, as called for under the WTO rules.  Few if any, expect China to yield much ground. It also allowed China to try to take the high ground by stressing the need for an “environment-friendly” approach, subtly trying to morph the export regime dispute into an environmental dispute about the harm being done in China.

It will be interesting to see if any the complainant’s industrial behemoths jump at the chance of teaming up with Chinese firms. Short term it would appear to make little sense, China gains new technology while the firm takes all the risk. Longer term though, it might make sense. As Apples i-Phone sales just demonstrated, China is a big growth market for decades to come. However, until and how the British murder scandal rocking China gets resolved, China might find it a little harder to attract intellectual property investment.

Still to this old Scot the tale of the spider and the fly comes to mind.

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April 25, 2012, 10:21 a.m. ET
China Reaches Out to Its Adversaries Over Rare Earths
BEIJING—China extended what it may have intended as an olive branch to the U.S., Japan and Europe in their dispute over rare earths even as it defended its export controls.

China's Ministry of Industry and Information Technology on Wednesday invited foreign companies to team up with local firms on rare-earth technology ventures, particularly on environment-friendly projects.

"The U.S.'s, Japan's and Europe's [capabilities] in environmental management, recycling, technology research and development of high-end applications are welcome in China," ministry spokesman Zhu Hongren told an online news conference.

China controls nearly all of the world's production of rare earths—a group of 17 minerals with high-tech uses ranging from personal computers to advanced weaponry—but hopes to move up the value chain to become a manufacturer of rare-earth-based products as well as supplier of the minerals.

As part of that strategy it has repeatedly invited foreign companies to work on China-based rare-earth joint ventures, both to bolster its own technological capabilities and address foreign complaints over its rare-earth quotas. But the latest gesture's emphasis on environment technologies and the singling out of the U.S., the European Union and Japan—which last month filed a rare-earth action before the World Trade Organization—as potential collaborators appeared to be an effort at least partly intended to address the WTO complaint.

"Will you walk into my parlor?" said the spider to the fly;
"'Tis the prettiest little parlor that ever you may spy.
The way into my parlor is up a winding stair,
And I have many curious things to show when you are there."
"Oh no, no," said the little fly; "to ask me is in vain,
For who goes up your winding stair can ne'er come down again."

  1. Exactly appropriate analogy!
    Only idiots or “flies” might try?
    Sorry General Electric, Siemens, Apple?
    Are you yet American or European? I think not?
    Or has your companies been robbed of your proprietary properties, and soon to be entangled and left for dead inside the Chinese Spider Web?
    Goodbye competitive advantage?
    Oh I see a small Chinese company has exclusive rights to the “I Pad” name inside China.
    When shall China decide that Apple’s proprietary property is actually China’s
    Kind regards,

  2. A good analogy indeeed, and Dr Roberts’ idiot/flies comments are appropriate. That is, excepting the fact that the idiots are most often the traders, traitors, bean counters and stockholders who hold no allegiance to anyone or anything save SP, dividends, and ROI.
    However, the opening statement here, “It takes seven [metric] tons of acid to produce one ton of rare-earth oxides, and the production creates a lot of ammonia, heavy metals and other pollutants,” Mr. Zhu said.”, is a significant point that needs to be addressed for anyone contemplating the construction of SX facilites in North America, or anywhere else. The hardrock mines of NA will need to focus on new technologies to dramatically increase the concentrations of the SX feeds to maybe double or triple those now achieved through conventional beneficiation. Both GWG and UCU are exploring this phase with their XRT sorting.

  3. as a player of the stock market I think any company should diversify!
    Getting stock from one place is putting your eggs in one basket
    not a good idea
    Siemens at least has teamed up with Lynas for its REE’s
    and Lynas has 10% of NTU for its HREE’s and stage 2 being built
    Now just weeks away from starting the first LAMP outside of CHina – Malaysia’s playing political football with the temp operating license that Lynas needs.
    A big political march tomorrow in KL should put the lid on the opposition and then Monday the TOL should be issued.
    The question what other industries has China been absorbing while the rest of the World was asleep at the wheel?

  4. Sorry. Always suspicious?
    Sweden has REEs. “Does China want to joint venture”?
    Wen uses “code words”:
    “Wen said China-Sweden sustainable development cooperation can be viewed as a highlight of green cooperation between developing and developed nations.”

  5. By the way, which is the “developed” and which is the “developing” when it comes to REE technology and green energy?
    Kind regards

  6. Wen pushes for closer co-op with Sweden
    Xinhua (April 26, 2012 5:16 PM)
    STOCKHOLM – Chinese Premier Wen Jiabao was pushing hard for closer Sino-Swedish cooperation on sustainable development as he mentioned this several times during his two-day official visit to Sweden that ended Wednesday.
    Sweden excels in modern manufacturing and high technologies, while China has taken sustainable development as a national strategy in its effort to accelerate economic structural adjustment and build an information-driven country, Wen told ministers attending an international forum on sustainable development on Wednesday before wrapping up his visit.
    “We are ready to enhance exchanges and deepen cooperation with Sweden in these areas,” he said.
    The forum was held to mark the 40th anniversary of the United Nations Stockholm Conference on the Human Environment.
    “Economic greenization is an engine instead of a burden for growth,” he said.
    The Chinese premier praised Sweden and the other Nordic countries for ” pioneering efforts on environment protection and sustainable development,” saying they have made remarkable achievements in promoting a harmonious relationship between man and nature.
    During his visit to Sweden, the first visit by a Chinese premier in nearly 30 years, bilateral cooperation on sustainable development was talked about on several occasions, including meetings with King of Sweden Carl XVI Gustaf and Prime Minister Fredrik Reinfeldt.
    The two sides scored a breakthrough in this regard by setting a framework of enhancing strategic cooperation in this regard.
    According to the framework, China and Sweden will establish a working group on environmental protection and energy conservation under the China-Sweden Economic and Trade Joint Commission, and try to cultivate new growth sectors by jointly building ecological areas within China’s national development zones.
    Wen said China-Sweden sustainable development cooperation can be viewed as a highlight of green cooperation between developing and developed nations.
    Positive results have already been yielded in existing bilateral cooperative projects, such as dioxin emission reduction in paper mills, mercury pollution prevention and renewable energy, as well as the projects including China’s Caofeidian industrial zone and Wuxi eco city in eastern China, Wen said.
    According to the official website of Center for Environmental Technology at the Embassy of Sweden in Beijing, over 20 cooperative projects on sustainable development are running successfully in China.
    Meanwhile, China also wants to strengthen innovation cooperation with Sweden for long-term benefit.
    The Chinese side is preparing to set up a special loan program with a lending capacity of 1 billion euros (1.3 billion U.S. dollars) to support businesses engaged in scientific research and industrial cooperation in both China and Sweden, Wen told the press on Tuesday after the talks with Reinfeldt.
    He said China will not forget the support and help from Sweden in sustainable development, adding “we are ready to work with Sweden to bring in an even brighter future for the mankind.”
    During his stay, Wen visited Swedish industrial hub Gothenburg and capital Stockholm, interacting with Swedish leaders, local officials, entrepreneurs and people from various sectors.

  7. What’s wrong with lawsuits?
    The underestimated equalizer?
    Who’s behind the curtain?
    I want a big payday for Lynas in WTO or the Hague Criminal Court?
    If China is bankrolling the Malaysia trouble, how much punitive damage award would stop China’s behavior?
    500 Billion AUD dollars is perhaps on the light side?

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